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Job Training, Wage Growth, and Labor Turnover

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  • Jacob Mincer

Abstract

Using explicit information on timing and duration of job training in panels of PSID men, I find negative effects of training on turnover and positive effects on wage growth in the firm and over longer periods (1968 to 1983). Wages of trainees grow 4-6% faster per year over periods of training compared to other workers or periods. Wage trajectories in the firm and across firms over longer periods are steeper for workers who engage in more training. These results are explainable by a positive correlation between general and firm-specific components of training. So is the apparent paradox that frequent movers' wages grow less in the long run than those of less frequent movers (stayers), despite wage gains in moving. Mobility wage gains are reduced by worker investment in training in the new firm. These mobility (search and matching) gains appear to contribute to job attachment in the presence of such investments.

Suggested Citation

  • Jacob Mincer, 1988. "Job Training, Wage Growth, and Labor Turnover," NBER Working Papers 2690, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2690
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    1. Marshall, Robert C & Zarkin, Gary A, 1987. "The Effect of Job Tenure on Wage Offers," Journal of Labor Economics, University of Chicago Press, vol. 5(3), pages 301-324, July.
    2. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-620, September.
    3. Gronau, Reuben, 1988. "Sex-Related Wage Differentials and Women's Interrupted Labor Careers--The Chicken or the Egg," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 277-301, July.
    4. Joseph Altonji & R. Shakotko, 1985. "Do Wages Rise with Job Seniority?," Working Papers 567, Princeton University, Department of Economics, Industrial Relations Section..
    5. Barron, John M & Black, Dan A & Loewenstein, Mark A, 1989. "Job Matching and On-the-Job Training," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 1-19, January.
    6. Jacob Mincer & Boyan Jovanovic, 1981. "Labor Mobility and Wages," NBER Chapters,in: Studies in Labor Markets, pages 21-64 National Bureau of Economic Research, Inc.
    7. James N. Brown, 1983. "Are Those Paid More Really No More Productive? Measuring the Relative Importance of Tenure Versus On-The-Job Training in Explaining Wage Growth," Working Papers 549, Princeton University, Department of Economics, Industrial Relations Section..
    8. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    9. Stafford, Frank & Duncan, Greg J., 1979. "The Use of Time and Technology by Households in the United States," Working Paper Series 21, Research Institute of Industrial Economics.
    10. Joseph G. Altonji & Robert A. Shakotko, 1985. "Do Wages Rise With Job Seniority?," NBER Working Papers 1616, National Bureau of Economic Research, Inc.
    11. Jacob Mincer, 1986. "Wage Changes in Job Changes," NBER Working Papers 1907, National Bureau of Economic Research, Inc.
    12. Abraham, Katharine G & Farber, Henry S, 1987. "Job Duration, Seniority, and Earnings," American Economic Review, American Economic Association, vol. 77(3), pages 278-297, June.
    13. Jovanovic, Boyan, 1979. "Firm-specific Capital and Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1246-1260, December.
    14. Joanne Salop & Steven Salop, 1976. "Self-Selection and Turnover in the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 619-627.
    15. repec:fth:prinin:187 is not listed on IDEAS
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